Mortgage Insurance
Buying a home is one of the most important investments
you will make. Protecting your purchase with Mortgage
Insurance is a vital tool to help protect your
family from loss in the event of tragedy.
Before advancing funds for your home purchase, most
financial institutions require proof of insurance. This
is often one of the last steps in your home purchase
process, and because banks provide this product directly,
it is often “easy” to sign up for their
insurance while finalizing your documents. Taking
a few minutes to investigate other options may, however,
provide you with significant savings, and better payout
options.
Mortgage Insurance provided by major financial
institutions is a ‘one size fits all’ product.
Changing your mortgage insurance from high cost ‘one
size fits all’ insurance to low cost personal
insurance can increase your real disposable income and
decrease your after tax costs.
One of the biggest differences between bank sold insurance,
and personal mortgage insurance is the formula for payout.
Personal insurance doesn't decline over time, while
bank sold insurance covers only your mortgage balance
at the time of payout. Payments calculated for both
types of insurance are based on the original purchase
price of your home. As you pay down your mortgage principal,
however, your payout amount decreases to match
your amount owing. With personal insurance, however,
your payout amount remains fixed at the original
value.
Other advantages of personal mortgage insurance are
as follows:
- Lower cost
- In the event of tragedy, you get paid, not the
bank
- If you change lenders, personal insurance goes
with you
- Blended terms can save you even more money
Since Mortgage Insurance is often mandatory, it is
a worthwhile exercise to shop around before you buy.
For information on personal mortgage insurance, our
team recommends that you contact the following individuals:
Jason Block or Walter Bergen
Phone: 604-859-3773
Fax: 604-859-5502
website: www.lifeinsuranceonly.ca
e-mail:
jason@lifeinsuranceonly.ca
